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When Nest Eggs Crack

THERE were some mornings in that awful year of 2008, when she lay half awake in bed, trying to keep track of all the Caroline Jacobsons she would need to be that day: mother to her 4-year-old, Sonya; wife to her architect husband, Jeff; daughter to her 79-year-old dad, dying of cancer; stepdaughter to his distraught second wife; set decorator for whatever TV commercial was being shot that week — Mr. Clean, Verizon Wireless, Bayer aspirin, Giant Eagle supermarkets.

And that was before she’d been Madoffed.

Some days, the 50-year-old Ms. Jacobson handed off her daughter to the baby sitter at 7:30 a.m., raced from their Brooklyn co-op to a production studio in Queens, put in a 12-hour day, then headed to the hospital in Manhattan to see her father.

No matter how fast she ran, she worried she was neglecting someone.

Her father had been a highly successful Madison Avenue ad executive. He had lived well — he loved opera, museums, the racetrack — but had also saved and invested his money and was generous with his two daughters, Ms. Jacobson and her twin sister, Louise Crawford, as well as their families.

Still, like many of his generation, her father had a prudent streak, preferred the subway to car services. When he grew thin from colon cancer, Ms. Jacobson tried to persuade him to hire a food-delivery service. When he wouldn’t, she and her sister would stop by his apartment with the minestrone or tongue sandwiches he loved.

She tried getting him to take a car service to his chemo sessions, but he was stubborn. And then, in mid-August, he called her saying he’d collapsed on the subway and two big men had to carry him up to the street.

Watching his slow, painful end was hard. And while Ms. Jacobson was aware he had left a substantial estate, she didn’t talk to her stepmother about the details for weeks. “We were so devastated,” she said. “I was in shock.”

In October, she received a copy of the will in the mail, indicating that the estate would be divided, with half going to her stepmother and the other half to be split between Ms. Jacobson and her twin. “I asked my stepmother how much,” Ms. Jacobson recalled. “She said: ‘I don’t know. It changes month to month.’ ”

By November, Ms. Jacobson said she knew there was an investment portfolio worth about $2 million, and despite the stock market crash, it hadn’t lost value. The name of the investment firm, which had offices in New York and London, didn’t mean anything to her, but she was impressed. “Obviously, this guy had to be a genius, if we hadn’t lost any money in the last six months,” she said.

SHE did worry that the money was invested all in one place.

On Dec. 8, Ms. Jacobson, her sister and stepmother had lunch at Teresa’s, a Ukrainian restaurant in Brooklyn Heights, and for the first time, she said, she eyeballed the records. “I had no idea what they meant,” she said. “My stepmother would say: ‘He has it all in T-bills. He’s buying new stuff.’ It looked like stock in Coca-Cola, Pfizer, Google, Microsoft, I.B.M.”

Credit
Josh Haner/The New York Times (papers) and Timothy Clary/Agence France-Presse — Getty Images; Illustration by The New York Times

“I figured, ‘This is how the wealthy do it.’ ”

“My stepmother said, ‘Let’s wait for the year-end statement before we do anything.’ I felt like, O.K., this is all good, a light at the end of a long tunnel. This is going to be my new life. It could be transformative.”

She and her husband live in an attractive, but modest co-op in Park Slope, two bedrooms, one bath, which they bought for $360,000 in 2000. His architect’s salary from the city and her job as a freelance set decorator earn them a combined salary of about $200,000, she said.

Now she let herself think of what they could do with $500,000: pay off the home equity loan they’d used to finance the failed in-vitro treatments and the cost of adopting Sonya from Russia. Put away money for Sonya’s college. Maybe buy a bigger two-bedroom in the building with a second bathroom. “I even had fantasy thoughts — buy a little country house,” she said.

“It allowed me to dream,” she said. “It was a nice feeling of this huge pillow protecting us.”

That week, Ms. Jacobson was putting together a contemporary kitchen for a Dial Soft Scrub commercial. “We had five days to pound it out,” she said.

On Thursday evening, Dec. 11, after putting Sonya to bed, she made a cup of tea, sat on the living room couch with her Mac in her lap, turned on “Antiques Roadshow,” and went searching online for the day’s news. She saw a headline about a major investment fraud.

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“I thought it was that crazy hedge fund guy,” she said, meaning Marc S. Dreier, the Manhattan lawyer accused of stealing $380 million from investors.

But when she clicked, she saw:

Bernard L. Madoff.

The very name on those old-style investment reports for rich people.

“I was in shock,” she said. “Oh this is insane, this was our worst nightmare. We had worried about losing money in the stock market, but ...”

She called her stepmother and mother. By 10 p.m., she had tracked down her sister. “I said: ‘I have some unfortunate news. Nobody’s sick and nobody’s died.’ ”

Her father’s name is one of 13,567 on the list of victims made public this week, but she asked that it not be published, to shield her stepmother, who she says is devastated by the loss. The stepmother may have to sell her home and fears publicity could drive the selling price down.

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Bernard L. MadoffCredit
Lucas Jackson/Reuters

Ms. Jacobson recalls waking the next morning before dawn: “You know how, when you have an argument with somebody, you wake up for a second, don’t remember and then it all comes flooding back?”

The last thing she wanted to do was go to work, but she said: “It’s not the kind of job you can call in sick. You’re a team of four, all depending on each other, on a five-day deadline.”

So she did what she has done since graduating college: She went to work.

As she raced around arranging for ovens and kitchen counters, she contacted her personal broker at Smith Barney. “He thought we might still be able to pull the money out of Madoff,” she said, so she hired a car service to take her stepmother and sister to her broker’s office. “Obviously an exercise in futility,” she said.

As a freelancer, she goes from one temporary office to another. And as she interspersed calls about kitchen cleansers with calls about the lost $2 million, she tried not to bother her office mate, though, she said, “people kept telling me I was talking loud.”

Hoping to recover something, the family has hired a lawyer and an accountant. Mr. Madoff’s lawyer, Ira Lee Sorkin, declined to comment.

MS. JACOBSON has learned the same awful lesson many of her fellow boomers have these last six months: to never be trusting about money again. “Who knows how much we’ll get back,” she said. “Some say pennies on a dollar. There are huge unknowns.”

“I came to this realization,” she said. “I said to my sister: ‘No one died. Our children are healthy.’ ”

She has lots of friends who have lost their protective pillows, too, and they didn’t have to be Madoffed to have depleted 401(k)’s, 529’s, I.R.A.’s, S.E.P.’s.

She knows many people who are out of work and she’s grateful to have a six-week movie job coming up.

Still, she said, “Those are the comments you say, but then at other times, there’s the truth of the disappointment.”